Arizona bill would allow health insurers to cut coverage

If insurers didn't have to cover cancer drugs or autism treatments or postnatal care, would they?

Arizonans may find out if a bill that won approval in the House late Wednesday becomes law.

The measure, Senate Bill 1593, would allow out-of-state companies to write health-insurance policies in Arizona. Those companies could have a competitive advantage if they're based in a state with few or no mandates on coverage. So, to give Arizona insurers a level playing field, lawmakers on Wednesday added a controversial amendment that would waive Arizona's 32 insurance mandates, which require insurers to cover a host of treatments and services.

That policy move should provide more freedom of choice in the insurance market, supporters say.

"Ultimately, by opening up these markets, it will drive down the cost of insurance to all," said Rep. Kate Brophy McGee, R-Phoenix.

Critics say the bill, along with another measure that passed Wednesday, could result in people with expensive illnesses losing insurance coverage.

"This is a full-charged attack against insurance regulation," said Rep. Debbie McCune Davis, D-Phoenix. "It will create a race to the bottom, where companies will offer little. They'll cover less because they'll offer less."

Ultimately, the bills won easy passage, with most of the 40 Republicans voting for them and Democrats against.

The bills now return to the Senate for final approval since the House made changes.

Protecting people

The bills sparked passionate debate on whether the free market or government mandates are the best way to help citizens protect their health.

For parents who in recent years have successfully fought for mandates, there's no debate: Without mandates, insurers will drop coverage. It only makes sense for the bottom line, said Denise Bianchi, who five years ago persuaded lawmakers to require insurance coverage to include treatment for a digestive disorder that made it impossible for her son to eat conventional food.

"I can assure you, they will not cover it," Bianchi said of a special medical food that lawmakers included on the mandate list in 2006. "If there's a loophole, they will use it."

The state has had insurance mandates for years, adding some to address maladies not covered by insurance and subtracting others as businesses, especially small ones, have complained about the cost of health insurance.

In 2008, Char Ugol persuaded lawmakers to add autism treatment to the list of mandated coverage. The bill was dubbed "Steven's Law" after her son. He's now 8 and flourishing because of the treatment the law allowed.

"I know the autism treatment has changed the trajectory of my son's life," she said. "He's almost normalized."

Steven now reads, writes and does double-digit subtraction, she said, remarkable progress given that, three yearsago, he had the speech ability of a baby.

If insurers are no longer required to provide such coverage, Ugol said, they will drop it. And that will force her, and likely other parents of autistic children, onto state-supported programs that have shrunk due to cost-cutting during the budget crisis.

Gretchen Jacobs, a Capitol lobbyist and the mother of an autistic daughter, said she and her husband tried to pay for their child's coverage out of pocket.

Unfounded fears

He introduced the amendment to SB 1593 that waives the mandate requirement. His seatmate, Sen. Nancy Barto, R-Phoenix, is the sponsor of the two insurance bills.

Smith said it's possible Arizona insurers may find a way to write policies that cover conditions listed in Arizona's mandates, such as autism, and do it cheaper than companies in other states.

SB 1593 is an attempt to introduce more competition in the insurance market, which should drive costs down, he said.

But skeptical lawmakers, such as Rep. Eric Meyer, D-Paradise Valley, said the only way to trim costs is to offer less.

"Mandates cost something," he said.

"At what expense are we willing to trade treatment for cancer, for autism, for newborns who need intensive care?"

Smith said people seeking insurance would have options even if the mandates were lifted: They could ask their employer to add coverage currently required by mandates.

Or, he said, "They can go and find another job."

Meyer scoffs at Smith's solution.

"You'll need to find a new job in this market, where there aren't any jobs?" he asked.

Disclosures

Another bill approved by the House on Wednesday might also might lead to a loss of coverage, some say.

SB 1591 bill would allow an insurance company to disclose to the administrator of a health-insurance policy - for example, a company's human-resources director - details of the claims made by individual policyholders.

If those claims are for pricey services such as caring for a premature baby, critics such as Meyer said employers could conclude they should drop that coverage to save money.

Rep. Nancy McLain, R-Bullhead City, and chairwoman of the House's Banking and Insurance Committee, said the bill did not require that such requests for information be granted; it permits only the request to be made. In any event, the information would be protected under the terms of federal privacy laws, so people using those services wouldn't be identified.

Like many of her Republican colleagues, McLain said she's not convinced the two bills would trigger a rash of reduced insurance coverage.

"How many insurance companies are going to risk the wrath of their clients, of people here in Arizona, if they start selling those (minimum) policies?" she said.

But for skeptics, it's hard to argue against the lure of the bottom line.

"Mandates prevent abuses by an insurance company to citizens who are paying for insurance," said Rep. Terri Proud, R-Tucson.